• otv
Sanjeev Kumar Patro

News Highlights

  • As per the SBI analysis, when the DAR (Debt to Assets Ratio) per household in Odisha was up by 95 per cent between 2012 and 2018, in urban Odisha the ratio had tumbled by 1070 percent.
  • Odisha is the only State to record this north-south pole divide between the rural and urban households in the indices of financial conditions.
  • The State lacks equitable growth. While urban Odisha has been recording a decline in debt burden, deterioration has been observed in the rural regions.

Even as the Naveen Patnaik led BJD government's pet slogan has been 'Ama Gaon, Ama Bikash', and moreover when Rs 1200 -1500 cr annual allocation were being made for rural development, the shocker is the average debt burden per household in rural Odisha had grown by a whopping 127 per cent.

The heights of rural distress in Odisha is evidenced by the fact that 43 per cent share of cash debt has been from the 'sahukars' (money lenders), not banks. What looks worrying is the share in 1981 was only 19 per cent.

The comparative numbers show rural Odisha now is borrowing more from sahukars than banks. As the interest rate quoted by sahukars were being astronomically high, the vicious cycle of debt burden may sink rural Odisha. And the outcome could be devastating, feel experts.

As per SBI research, based on NSSO's All India Survey on Debt and Investment 2019, the average amount of debt per rural household in Odisha in 2012 was Rs 14,000. However, as per the NSSO report, the amount in 2018 clocked a 127 per cent rise to touch Rs 31000.

Odisha Vs Neighbours

While the rate of growth in the average amount of debt per rural household in Andhra Pradesh was 118 per cent between 2012 and 2018, the growth in Chhattisgarh had been mere 28 percent.

Similarly, when the growth rate had been 60 per cent in rural West Bengal, the rate in Jharkhand was 56 percent.

The above comparative number-crunching shows the extent of rural distress is higher in Odisha vis-a-vis the neighbouring states.

Rural Penury Vs Urban Luxury

As per the SBI analysis, the urban households in Odisha have grown richer, whereas rural counterparts had turned debtors.

"In urban Odisha, the average amount of debt per household had nosedived by 54 percent to touch Rs 53000 from Rs 1.16 lakh in 2012. Odisha is the only state to record such a steep drop in average debt amount per household," the data reveals.

But the same story of affluence is not registered in rural Odisha. The debt amount here has more than doubled.

Similarly, as per the SBI analysis, when the DAR (Debt to Assets Ratio) per household in Odisha was up by 95 per cent between 2012 and 2018, in urban Odisha the ratio had tumbled by 1070 percent.

Odisha is the only State to record this north-south pole divide between the rural and urban households in the indices of financial conditions.

The above comparison clearly outlines the lack of equitable growth in Odisha. While urban Odisha has been recording a decline in debt burden, deterioration has been observed in the rural regions.

The point to note here is 83.3 percent population in the State dwells in rural regions, only 17 percent inhabit urban areas.    

SBI On Debt 2021 Amid Pandemic   

"As per the AIDIS report 2018, the average amount of debt among rural households is at Rs 59,748 and in urban households is Rs 1.20 lakh. We estimated the 2021 rural & urban HH debt to track the impact of COVID-19 on the households. In 2021 the rural HH debt is expected to increase to Rs 1.16 lakh and urban to Rs 2.33 lakh, indicating that COVID impacted the households significantly," observed SBI chief economic adviser Soumyakanti Ghosh.

Odisha Impact

When in a normal year the State had recorded a sharp rise in indebtedness, going by the SBI report, the distress in rural Odisha would have touched rock bottom in 2021.  This is not a mere surmise.

A detailed glance at an earlier SBI report shows that the rural districts in Odisha took a pie of 79.6 per cent of the State's daily caseload to occupy the 3rd spot in the country, after Chhattisgarh and Andhra Pradesh.

Moreover, the report finds that among the top 3-states, Odisha is the only state that showed a maximum rise in its rural districts vis-a-vis the cases in the first wave.

The Bottomline: A look at the overall scenario of debt and pandemic clearly hints that rural distress in Odisha has become more acute in the pandemic times.

Other Stories